S&P assigns BBB to SQM notes

Standard & Poor's said it assigned its BBB debt rating to Sociedad Quimica y Minera de Chile SA's (SQM; BBB/stable/--) proposed senior unsecured notes due 2025.

Proceeds are expected to be used primarily to refinance existing debt.

S&P said the rating reflects the corporate credit rating on SQM, which is based on the company's strategic location and access to high-quality natural reserves in the Atacama Desert in Chile resulting in an efficient cost structure. This enhances SQM's unique business as a specialty plant nutrition producer and should allow the company to continue generating relatively high operating margins over the next five years.

The ratings also reflect the company's ample operating cash generation and substantial cash balances compared with its moderate debt. These strengths mitigate the company's exposure to price and margins volatility. The agency expects the company to continue to report total debt to EBITDA less than 2 times and funds from operations to debt above 40%.

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